Gov. Hassan: Business tax changes hurting budget

PORTSMOUTH — Gov. Maggie Hassan said she believes changes made by the last Legislature to business taxes may be hurting the state's budget.

Jeff McMenemy

PORTSMOUTH — Gov. Maggie Hassan said she believes changes made by the last Legislature to business taxes may be hurting the state's budget.

"Certainly we saw changes from the last Legislature and we're trying to understand what the impact on our revenues has been," Hassan said during an interview Friday. "We think those changes may have been an issue. All of the spending decisions that were made were made by bipartisan groups of legislators and our office and we're following all those decisions ... very, very closely."

Hassan, the state's Democratic governor, also said in a recent press release from her office that "shortfalls in revenues from business taxes and the interest and dividends tax make it increasingly clear that the changes made to the tax code by the last Legislature are having a negative impact on the state's budget."

Newmarket Town Administrator Steve Fournier, who is also chairman of the Board of Directors for the New Hampshire Municipal Association, said the issue with state revenues is not "one Legislature's problem."

"It's been going on for years," Fournier said.

Most municipalities "receive very little from the state," Fournier said, adding, "We have to raise it all by ourselves."

Fournier said the state eliminated any contribution for local employees to the state retirement system, forcing municipalities to absorb that cost.

But Fournier is opposed to a broad-based tax, saying that's one advantage the state has in bringing businesses to New Hampshire.

"I think they need to look at what they're spending and how to encourage more businesses to come up here," Fournier said.

Newmarket Town Councilor Phil Nazzaro, who is also a candidate for a New Hampshire state Senate seat, believes falling state revenues are an indication of a "fundamental flaw in our economy right now."

He said Massachusetts, which has a sales and income tax, has a lower business profits tax than New Hampshire.

"If we had a lower business profits tax and try to make ourselves more attractive to companies, a lower business tax could create higher revenues," Nazzaro said.

Asked about imposing even a small sales tax in New Hampshire, Nazzaro, a Republican who is running against state Sen. Martha Fuller Clark, D-Portsmouth, said he would be opposed to one, especially because of the "weakness of our economy."

He said state officials should look first at cutting expenses before they think about adding a broad-based tax.

"I'm saying we should overturn every stone there (in the state budget) before we look anymore else," Nazzaro said.

He also pointed to the work of the Newmarket Town Council, which has stabilized the town's budget without cutting services over the last several years.

"I'm not saying it's easy. Hard choices have to be made," Nazzaro said.

Hassan said she, too, remains opposed to either a sales or income tax, but maintains her support for a casino.

"The reason I support a single high-end destination casino is it's a revenue stream we have in New Hampshire that's going to other states, and I'd rather keep it here," Hassan said.

Asked if she was concerned about the reports of failing casinos — like those in Atlantic City — Hassan said, "Some casinos have done well, and others that have not before (had) competition are having challenges, as is true with any business."

But Fournier believes it's an open question if a casino would succeed in New Hampshire.

"Casinos, right now, the business is not there," Fournier said. "If you saturate the market, they can't all make money."

Durham Town Administrator Todd Selig said, "It's going to be a hard slog for state government with this year's budget."

The economy is relatively flat and while homes in the Seacoast area are in high demand, town and state officials are going to have to find ways to "make government more efficient," Selig said.

"You have to be willing to undertake rigorous experimentation," Selig said. "If you're not doing that and if you're not taking risks, you're not going to make improvements."

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